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WNY FOLLOWS TREND OF LOWER GAS PRICES

Prices at the gasoline pump are falling both here and across much of the nation.

In Western New York, the pleasant trend could continue for about another week.

The American Automobile Association announced Thursday that the average price of self-serve regular unleaded gasoline across the nation has dropped from $1.37.1 a gallon on Dec. 18 to $1.28.2.

Locally, that gallon of gasoline costs about $1.33 or $1.34 a gallon, down 6 cents from Dec. 1, said Gerry J. Ryan, public-relations director for the Automobile Club of Western New York.

"We do follow the national trend," Ryan said, "but for some reason, we are a week or two behind."

Why are gas prices falling?

Norman R. Grapes Jr., executive director of the United Garage and Gasoline Retailers of Western New York, pointed to the recent drop in the price of crude oil, the public pressure against excessive pump prices and the softer demand for gasoline. Higher gasoline prices have caused some budget-conscious travelers to forgo their driving trips, or shorten them.

Ryan put it another way as he described the rapid escalation of gasoline prices after the Iraqi invasion of Kuwait on Aug. 2.

"I have a feeling that since it was such a false increase, prices are settling down now," he said. "Sooner or later, it was going to collapse on them."

A check of nationwide gasoline prices since the Iraqi invasion documents what everyone remembers: an amazingly quick, steep rise in the price of gasoline.

In one week, from Aug. 1 to 8, the nationwide average increased by more than 16 cents a gallon, from $1.07.5 to $1.23.7.

While gasoline prices have fluctuated greatly since then, the current nationwide average is lower than the $1.30.7 of Aug. 29.

Indications are that prices have begun to settle down.

"Previously, every time Saddam Hussein sneezed, the prices would fluctuate," said Art Kinsman, manager of government affairs for the Auto Club in Massachusetts.

The list of nationwide gasoline prices since the beginning of the Persian Gulf crisis demonstrates one rule of thumb in pump prices, said Kinsman: "Prices never go down as quickly as they go up."

The highest average gasoline price in the current crisis was the $1.38.7 registered Dec. 4. That came within one-tenth of a penny of the all-time high of $1.38.8 during Easter week 1981, according to the Automobile Club.

Although the 5.1-cent-a-gallon federal excise tax took effect Dec. 1, the price increase at the pump has been smaller than expected. Observers expected the pump price to be bumped up a full nickel. Yet the price of a gallon of gasoline increased by only 2.1 cents from Nov. 27 to Dec. 4.

Why?

Wholesale and futures prices for gasoline and oil fell during that same time period. Also, some of the price increase might have been passed on to the consumer before the increase actually took effect.

The uncertain situation in the Persian Gulf region makes it pointless to predict future gasoline prices, according to the experts. Grapes said that "anybody in their right mind shouldn't predict anything."

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